Saudi Arabia's PIF acquires $1bn stake in Sweden's Embracer gaming group

Savvy Gaming Group, a unit of the kingdom's sovereign wealth fund, continues to invest in the games and e-sports industry

The Riyadh skyline. Saudi PIF’s 2021-2025 strategy is to drive innovation in strategic sectors, including entertainment, leisure and sports. Reuters

Saudi Arabia’s sovereign wealth fund has acquired an 8.1 per cent stake worth $1 billion in Swedish gaming business Embracer Group as it strengthens its portfolio in the sector.

The Public Investment Fund’s Savvy Gaming Group (SGG), which was launched in January in line with its 2021-2025 strategy to drive innovation in strategic sectors such as entertainment, leisure and sports, acquired about 99.9 million shares for about 10.3 billion Swedish krona ($1.05bn), Embracer said in a statement on Wednesday.

“Savvy Gaming Group has committed to invest heavily in the games and e-sports industry, and to materially strengthen the global games community,” said SSG chief executive Brian Ward.

“This investment in Embracer Group is a starting point for a long-term commitment to the company. The Embracer team has built a truly unique and leading ecosystem of entrepreneurs and creators at a scale which we believe will continue to generate enormous value for the games community in the coming years.”

Embracer plans to set up a regional centre in Saudi Arabia on the back of the relationship with SGG, said Lars Wingefors, founder and group chief executive of Embracer Group.

The group will “be able to make investments across the Mena region, either organically, via partnerships, joint ventures or via acquisitions of companies led by strong entrepreneurs”, Mr Wingefors said.

SGG purchased ESL Gaming — one of the largest independent e-sport companies — from Stockholm-based Modern Times Group in January in an all-cash transaction of $1.05bn.

It also acquired e-sports platform Faceit and said it would merge the two companies to create a new global entity for competitive gaming called ESL Faceit Group, which is expected play a key role in meeting SGG’s objectives, PIF said.

The Public Investment Fund acquired a 5.01 per cent stake in Japan's Nintendo last month.

It bought about 6.5 million shares in Kyoto-based Nintendo, the creator of Super Mario and maker of video game consoles, making the fund the fifth-largest shareholder in the company, according to Bloomberg data.

The investment in Nintendo was the PIF's third in a Japanese gaming company, after deals to acquire stakes of more than 5 per cent in online game makers Capcom and Nexon.

The fund also took a stake in US company Activision Blizzard, the Call of Duty publisher that Microsoft announced it would buy for $68.7bn in January.

Its stake in Activision at the end of the first quarter of this year was worth $3bn, according to the latest regulatory filing.

Gaming consumption in Saudi Arabia, the Arab world's largest economy, is estimated to reach $6.8bn by 2030, according to the Boston Consulting Group.